oversight

Puerto Rico Department of Education's Compliance with Title I - Supplemental Educational Services (SES).

Published by the Department of Education, Office of Inspector General on 2009-04-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

   Puerto Rico Department of Education’s Compliance with 

         Title I – Supplemental Educational Services




                              FINAL AUDIT REPORT




                                           ED-OIG/A04I0041
                                              April 2009



Our mission is to promote the efficiency,                    U.S. Department of Education
effectiveness, and integrity of the Department’s             Office of Inspector General
programs and operations                                      Atlanta, GA
                              NOTICE

 Statements that managerial practices need improvements, as well as
 other conclusions and recommendations in this report, represent the
   opinions of the Office of Inspector General. Determinations of
corrective action to be taken, including the recovery of funds, will be
    made by the appropriate Department of Education officials in
       accordance with the General Education Provisions Act.

In accordance with the Freedom of Information Act (5 U.S.C. § 552),
   reports issued by the Office of Inspector General are available to
  members of the press and general public to the extent information
       contained therein is not subject to exemptions in the Act.
                                  UNITED STATES DEPARTMENT OF EDUCATION
                                                       OFFICE OF INSPECTOR GENERAL

                                                                                                                           Audit Services
                                                                                                                              Region IV

                                                                 April 21, 2009

Honorable Carlos Chardón
Secretary
Puerto Rico Department of Education
P.O. Box 190759
San Juan, Puerto Rico 00919-0759

Dear Secretary Chardón:

Enclosed is our final audit report, Control Number ED-OIG/A04I0041, entitled Puerto Rico
Department of Education’s Compliance with Title I – Supplemental Educational Services (SES).
This report incorporates the comments you provided in response to the draft report. If you have
any additional comments or information that you believe may have a bearing on the resolution of
this audit, you should send them directly to the following Education Department official, who
will consider them before taking final Departmental action on this audit.

                                           Joseph Conaty
                                           Acting Assistant Secretary
                                           Office of Elementary and Secondary Education
                                           U.S. Department of Education
                                           400 Maryland Avenue, SW
                                           Washington, D.C. 20202

It is the policy of the U. S. Department of Education to expedite the resolution of audits by
initiating timely action on the findings and recommendations contained therein. Therefore,
receipt of your comments within 30 days would be appreciated.

In accordance with the Freedom of Information Act (5 U.S.C. § 552), reports issued by the
Office of Inspector General are available to members of the press and general public to the extent
information contained therein is not subject to exemptions in the Act.

                                                                 Sincerely,

                                                                 /s/
                                                                 Denise M. Wempe
                                                                 Regional Inspector General for Audit

Enclosure


 The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                   excellence and ensuring equal access.
                                              TABLE OF CONTENTS




                                                                                                                                 Page


EXECUTIVE SUMMARY ...........................................................................................................1 


BACKGROUND ............................................................................................................................3 


AUDIT RESULTS .........................................................................................................................4 


          FINDING NO. 1 – Title I Requirements Not Included in Individual Student 

                          Agreements .........................................................................................4 


          FINDING NO. 2 – Contract Terms Not Enforced.............................................................6 


          FINDING NO. 3 – Lack of Controls to Ensure Parents Selected the SES 

                          Provider of Choice ............................................................................13 


OTHER MATTERS ....................................................................................................................16 


OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................................18 


Enclosure 1: PRDE Comments on the Draft Report ................................................................20


               Acronyms/Abbreviations Used in this Report

AMAR         AMAR Educational Services, Inc.

AYP          Adequate Yearly Progress

C.F.R.       Code of Federal Regulations

Department   U.S. Department of Education

ESEA         Elementary and Secondary Education Act

LEA          Local Educational Agency

OESE         Office of Elementary and Secondary Education

PRDE         Puerto Rico Department of Education

RL           Rocket Learning, Inc.

SEA          State Educational Agency

SES          Supplemental Educational Services
Final Report
ED-OIG/A04I0041                                                                        Page 1 of 27


                                  EXECUTIVE SUMMARY 



The objectives of the audit were to determine whether the Puerto Rico Department of Education
(PRDE) (1) ensured that contracts awarded to Supplemental Educational Services (SES) providers
contained the elements specified in Title I of the Elementary and Secondary Education Act (ESEA)
and its implementing regulations; (2) ensured that the contractors provided SES in accordance with
the contract terms; and (3) properly approved SES providers.

We found that the contracts PRDE entered into with SES providers to provide SES to eligible
students attending Title I schools during the school year 2006-2007 generally contained the
elements required by Title I of the ESEA and its implementing regulations. However, PRDE did
not include several specific Title I requirements in the individual student agreements established
with the SES providers as specified under section 1116(e)(3) of the ESEA. We also found that
PRDE lacked control mechanisms to ensure that the SES providers provided the services in
accordance with the terms of the contracts. As a result, it paid the SES providers $6,250 in
questioned costs – $4,411 for services provided to non-eligible students and $1,839 for services not
rendered – and $16,092 in unsupported costs. Also, PRDE did not withhold $44,177 in fees due
from the SES providers’ invoices in payment for the use of its facilities to provide the contracted
services. In addition, although PRDE properly approved SES providers, it did not ensure that
parents of eligible school children selected the SES provider of their choice. Specifically, PRDE
did not ensure that parents were informed of the identity of all approved SES providers and failed to
coordinate school orientation activities as required by its own regulation, which restricted parents in
selecting an SES provider.

We recommend that the Assistant Secretary for Elementary and Secondary Education (OESE)
require PRDE to —

   		 Establish controls to ensure that the individual student agreements established with the
       providers include all the elements required by Title I of the ESEA and its implementing
       regulations;

   		 Provide documentation demonstrating that the students identified by the auditors as
       ineligible to receive SES were, in fact, eligible and documentation demonstrating that the
       students identified by the auditors as not having received SES did in fact, receive such
       services, or return to the U.S. Department of Education (Department) the $6,250 in
       questioned costs paid for which such documentation is not provided;

   		 Provide supporting documentation for the unsupported charges or return to the Department
       that portion of the $16,092 in unsupported costs paid;

   		 Establish controls to ensure that school directors properly verify SES forms before certifying
       that students come from low-income families to ensure that only eligible students participate
       in the program and that services are provided before processing providers’ payments;
Final Report
ED-OIG/A04I0041                                                                      Page 2 of 27

   		 Take appropriate actions to address the issue of services not rendered, and provide a 

       response; 


   		 Recover the $44,177 from the providers for the amount owed for the use of its facilities to
       provide SES; review the remaining providers’ payments to identify any other payment made
       without the appropriate deduction and recover the associated fee; and establish adequate
       controls to ensure that checks are issued for the correct amount;

   		 Ensure that PRDE teachers hired by all SES providers, who provide instruction in Spanish,
       English, or mathematics during regular school hours, do not provide SES to the same
       students they teach during the school day; and

   		 Establish adequate controls at the schools to ensure compliance with the elements specified
       in the Title I regulations for providing parents with choices of SES providers and ensure that
       the parents are presented with information identifying all SES providers from which they
       can select to meet their children’s needs.

In its response to the draft audit report, PRDE generally concurred with Finding No. 1 (presented in
the draft as Finding No. 3). However, PRDE did not concur with Finding No. 2 regarding the
eligibility of SES students and the provision of minimum contact hours of SES, as well as Finding
No. 3 (presented in the draft as Finding Nos. 1 and 2, respectively). PRDE submitted extensive
supporting documentation to account for the expenditures questioned in the draft report and
requested that the two findings be reconsidered and revised.

We considered PRDE’s response and the additional documentation submitted and further revised
the approach to Finding No. 3 and its related recommendation to better reflect the results of our
review. However, PRDE did not provide any additional information that would warrant a change to
Finding No. 2, nor did it provide information that would warrant a change to any of the related
recommendations. PRDE’s comments are summarized after the recommendations section of each
finding. The full text of PRDE’s response is included as Enclosure 1. Copies of the attachments
that were included with the response are available upon request.
Final Report
ED-OIG/A04I0041                                                                                      Page 3 of 27


                                               BACKGROUND




Title I, Part A of the ESEA, as amended, requires the local educational agencies (LEAs) to offer
SES to students from low-income families1 when the students attend a Title I school that is in the
second year of school improvement or is identified for corrective action or restructuring.2 During
2006-2007, PRDE identified a total of 578 schools that failed to make adequate yearly progress
(AYP) for more than two consecutive years.

SES consists of tutoring and other supplemental academic enrichment services that are of high
quality, researched-based, specifically designed to increase the academic achievement of eligible
students and are in addition to instruction provided during the school day. State-approved SES
providers, selected by the individual student’s parent3 provide the services to eligible students under
agreements with LEAs. An SEA is required to approve providers that meet the statutory and
regulatory requirements for SES providers. A provider may be a non-profit entity, a for-profit
entity, an LEA, an educational service agency, a public school, or a private school. An LEA is
obligated to notify parents of eligible students of the availability of SES, the identity of approved
providers, and a brief description of the services, qualifications, and demonstrated record of
effectiveness of each provider. Parents of eligible students can select any approved provider that
they feel will best meet their child’s needs.

PRDE, in its role as an SEA, is responsible for approving SES providers, maintaining a State list of
all approved providers, and monitoring the quality and effectiveness of services offered by the
approved providers. In its role as an LEA, PRDE enters into contracts with third parties to provide
SES. For the school year 2006-2007, PRDE awarded 47 contracts (including amendments) to 18
SES providers totaling $112 million.

We reviewed contracts awarded to two of the 18 SES providers for services rendered during the
school year 2006-2007 to eligible students that attended Title I schools in their second year of
school improvement, in corrective action, or in restructuring – one contract was awarded to AMAR
Educational Services, Inc. (AMAR) totaling $15,951,280 and the other to Rocket Learning, Inc.
(RL) totaling $13,105,680. During the period of the contracts,4 AMAR provided services to 166
schools and RL provided services to 152 schools. We also partially reviewed the contract awarded
to AMAR to provide SES during the school year 2007-2008 totaling $22,089,780.5 From the three
contracts, we selected a sample of 12 schools (six per contractor) and 65 students (35 from AMAR
and 30 from RL), and reviewed 12 paid invoices – six from AMAR totaling $439,046 and six from
RL totaling $444,496.
1
  The “low-income” family determination is based on the same data that an LEA uses to allocate Title I, Part A funds to 

its schools under section 1113(c)(1) of Title I.


2
  Under the ESEA, Title I schools that fail to make AYP for two consecutive years are identified for school


improvement; schools that do not make AYP for four years are identified for corrective action; and those that do not 

make AYP for five years are identified for restructuring.


3
  A “parent” includes a legal guardian or other person standing in loco parentis (such as a grandparent or stepparent


with whom the child lives, or a person who is legally responsible for the child’s welfare). 

4
  November 21, 2006 – June 30, 2007. 

5
  For this contract only a sample of five students was selected to determine whether the process followed by PRDE to


provide services to the students during the previous year remained unchanged and services were rendered appropriately. 

Final Report
ED-OIG/A04I0041                                                                                         Page 4 of 27


                                                AUDIT RESULTS




We found that the contracts PRDE entered into with SES providers to provide SES to eligible
students attending Title I schools during the school year 2006-2007 generally contained the
elements required by section 1116(e) of the Title I of the ESEA and its implementing regulations.
However, PRDE did not include several specific Title I requirements in the individual student
agreements established with the SES providers as specified under section 1116(e)(3) of the ESEA.
We also found that PRDE lacked control mechanisms to ensure that the contractors provided the
services in accordance with the terms of contracts. As a result, PRDE paid the contractors $6,250 in
questioned costs – $4,411 for services provided to non-eligible students and $1,839 for services not
rendered – and $16,092 in unsupported costs. Also, PRDE did not withhold $44,177 in fees due
from the SES providers’ invoices in payment for the use of its facilities to provide the contracted
services. In addition, although PRDE properly approved SES providers, it did not ensure that
parents of eligible school children selected the SES provider of their choice. Specifically PRDE did
not ensure that parents were informed of the identity of all approved SES providers and failed to
coordinate school orientation activities with all approved SES providers as required by its own
regulation, which restricted parents in their selection of an SES provider.

FINDING NO. 1 – Title I Requirements Not Included in Individual Student Agreements

As part of the registration process followed to enroll students in the SES program, PRDE
established individual student agreements6 with the SES providers selected by the parents, based on
the requirements of section 1116(e)(3) of Title I of the ESEA and its implementing regulations.
However, PRDE lacked controls to ensure that the individual student agreements for the school
years 2006-2007 and 2007-2008 included all the required elements.

Under section 1116(e)(3), of the ESEA, the LEA shall enter into an agreement with an SES
provider selected by the parent. The agreement must include, among other terms, a requirement
that the LEA–

            develop, in consultation with parents (and the provider chosen by the parents), a
           statement of specific achievement goals for the student, how the student’s progress
           will be measured, a timetable for improving achievement; describe how the student’s
           parents and the student’s teacher or teachers will be regularly informed of the
           student’s progress; provide for the termination of such agreement if the provider is
           unable to meet such goals and timetables; contain provisions with respect to the
           making of payments to the provider by the local educational agency; and prohibit the
           provider from disclosing to the public the identity of any student eligible for, or
           receiving, supplemental educational services under this subsection without the written
           permission of the parents of such student.[7]



6
    The agreements are known as form “SES 102.” 

7
    The requirements are detailed in section 1116(e)(3)(A)-(E) of the ESEA; 34 C.F.R. § 200.46(b)(2)(i).


Final Report
ED-OIG/A04I0041                                                                      Page 5 of 27

The individual student agreements for the school years 2006-2007 and 2007-2008 did not include
the following required elements –

      Information on how the parents and teachers would be regularly informed of the students’
       progress;
      A timetable or timeline for improving the students’ achievement, specifically for the school
       year 2007-2008;
      A provision for terminating the agreement if the provider failed to meet student progress
       goals and timetables;
      Provisions governing payment for the services, including provisions addressing missed
       sessions; and
      A provision prohibiting the provider from disclosing to the public the identity of any student
       eligible for, or receiving SES, without the written permission of the student’s parents.

Because the individual student agreements did not contain all of the information required by Title I
and its implementing regulations, parents and teachers were not adequately informed about the SES
program provisions and their rights to information.

Recommendation:

We recommend that the Assistant Secretary for OESE require PRDE to—

1.1		 Establish controls to ensure that the individual student agreements established with the
      providers include all the elements required by Title I of the ESEA and its implementing
      regulations.

PRDE’s Comments

PRDE basically agreed with the finding and stated that it was working to improve the individual
student agreements to include all the elements required by the Title I regulations. However, PRDE
disagreed that the agreements lacked information on how the parents and teachers would be
regularly informed of the students’ progress. According to PRDE, the agreements currently require
that the providers inform the parents and teachers of the SES students’ progress after a certain
number of hours of tutoring, agreed upon between the providers and the parents, are performed.

OIG’s Response

We acknowledge that PRDE is working to improve the individual student agreements to include all
the elements required by the Title I regulations. Although the form submitted in PRDE’s response
included the required element on informing parents and teachers, it pertained to the agreement used
for school year 2008-2009, not the one used for the school years reviewed (2006-2007 and 2007­
2008). Therefore, we did not change the finding. We also did not change the recommendation
because the recommendation addresses general controls that PRDE must establish to ensure that the
individual student agreements include all the elements required by the Title I statute and
implementing regulations, not only the requirement on informing parents and teachers.
Final Report
ED-OIG/A04I0041                                                                                    Page 6 of 27

FINDING NO. 2 – Contract Terms Not Enforced

PRDE lacked controls to ensure that AMAR and RL provided SES to eligible public school students
during the school year 2006-2007 in accordance with the terms of the contract between PRDE and
the provider and lacked controls to ensure that services were rendered. Specifically, PRDE failed to
follow its own SES guidelines and did not enforce the terms of the contracts. As a result, it paid the
SES providers questioned costs totaling $6,250 – $4,411 for services provided to non-eligible
students and $1,839 for services not rendered8 – and unsupported costs totaling $16,092. In
addition, PRDE did not (1) deduct the $44,177 in fees from providers’ payments for the use of
PRDE’s facilities to provide the services to the students in accordance with the terms of the
contracts; (2) ensure that RL provided students a minimum of 40 contact hours of SES, as required
by PRDE; and (3) preclude AMAR and RL from contracting with PRDE teachers to provide SES
after school hours to the same students to whom they provided instruction in Spanish, English, or
mathematics during regular school hours, a practice prohibited by PRDE policy.

Under 34 C.F.R. § 76.702, “[a] State and a subgrantee shall use fiscal control and fund accounting
procedures that insure proper disbursement of and accounting for Federal funds.” In addition, 34
C.F.R. § 80.20(a)(3) provides that “[e]ffective control and accountability must be maintained for all
grant and subgrant cash….”

SES Provided to Non-Eligible Students

PRDE failed to properly identify non-eligible students who received SES during the school year
2006-2007. As a result, it paid $4,411 in questioned costs – $3,335 to AMAR and $1,076 to RL. In
addition, PRDE paid the two contractors $16,092 in unsupported costs – $7,781 to AMAR and
$8,311 to RL. Specifically, school directors did not properly verify SES forms before certifying
that students were from low-income families. Absent such verification, PRDE has no controls to
prevent ineligible students from participating in the SES program, and we found that ineligible
students participated in the program.

According to clause number 3 of the contracts between PRDE and the SES providers and in
accordance with section 1116(e) of the ESEA, the SES providers were to provide services to
eligible students – students from low-income families who attended a Title I school in its second
year of improvement, in corrective action, or in restructuring. Section 1116(e)(12)(A) defines an
eligible child as “a child from a low-income family, as determined by the LEA for purposes of
allocating funds to schools under section 1113(c)(1).”

PRDE based student eligibility on family income and the number of members in a family. To be
eligible to participate in the SES program, a student’s family income had to be below the poverty
level established by PRDE during the school year. We selected a sample of 65 students9 who
received SES during the school years 2006-2007 and 2007-2008, and reviewed the socioeconomic
study forms PRDE used to determine student eligibility. We found four students who received
services but were ineligible, and we could not determine the eligibility of 17 additional students
who received services because either the income information was missing from the forms (two


8
    Of the $1,839, $1,140 related to services not rendered during the school year 2007-2008.
9
    60 students from the school year 2006-2007 and five students from the school year 2007-2008.
Final Report
ED-OIG/A04I0041                                                                                         Page 7 of 27

students) or the forms could not be located for our review (15 students). Specifically, of the 65
students’ forms reviewed:

     		 We could not determine eligibility for two students (or 3 percent of our sample) because the
         family income information was missing from the forms. For both students, the school
         director signed the SES enrollment form certifying that the students were from low-income
         families. Based on our review, PRDE paid unsupported costs of $2,152 to AMAR for SES
         provided to these two students.

     		 We found four students ineligible for the services received (or 6 percent of our sample)
         because the reported family income was above the poverty level established by PRDE for
         the school year 2006-2007. Although the parents of all four students reported income above
         that established by PRDE for eligibility determination, the directors of the schools signed
         the SES enrollment form certifying that the four students were from low-income families,
         and, as such, those students received SES, which resulted in questioned costs of $4,411.

     		 We verified that 44 students10 (or 68 percent of our sample) were eligible to receive SES
         based on the information reported on the forms reviewed.

     		 PRDE could not locate the forms for the remaining 15 students (or 23 percent of our
         sample), resulting in additional unsupported costs of $13,940 – $7,781 paid to AMAR for
         seven students and $6,159 paid to RL for eight students.

Services Not Rendered

PRDE paid $1,839 in questioned costs for services not rendered – $699 to RL during the school
year 2006-2007 and $1,140 to AMAR during the school year 2007-2008. PRDE did not have
adequate controls in place to ensure services at the schools were rendered. PRDE relied on the
supporting documentation submitted by the SES providers to pay the invoices. Once the invoices
were received by PRDE’s SES Central Division, the invoices and supporting documentation were
reviewed and certified as correct by PRDE’s SES Coordinator who would then send them to the
Payment Division for payment processing. The lack of controls to ensure services were rendered
before processing providers’ invoices left SES grant funds vulnerable to mismanagement and
misuse.

We interviewed the parents of 27 of the 65 sampled students. Two of them stated that services had
not been provided to their children and allowed us to interview their children. One student stated
she never attended the SES sessions but signed the attendance rosters in exchange for extra points.11
The other student stated she attended on six or seven12 occasions but signed the attendance rosters as
if she had received all the required contact hours when asked to do so by the SES teacher.

We asked the two teachers listed as providing services to these two students about the allegations.
One teacher, contracted by AMAR, stated that she certified providing SES to the student at the
request of the AMAR School Coordinator, even though the student attended only one session. The
10
   Includes the five students selected from the 2007-2008 school year. 

11
   Based on the information provided by the student, the extra points were given by the English teacher.


12
   Based on seven occasions the student attended at a rate of 2 hours per day, the student received only 14 contact hours.


Final Report
ED-OIG/A04I0041                                                                                        Page 8 of 27

teacher agreed that she had not provided the services but stated that the AMAR School Coordinator
had requested that she certify the attendance roster because the student had received the services
from another teacher. In response to the request, she signed the document because she was new to
the program. The student claimed to not know the teacher nor to have received any services at all.
The other teacher, contracted by RL, stated that the student would not show up to the sessions and
she had to constantly look for her but maintained that the student eventually made up all the
sessions she had missed. However, the parent stated that the student did not attend all the sessions,
that she was not obtaining the help she needed, and that the service appeared to be more like a day
care than SES. As a result, we question costs paid of $1,140 to AMAR and $69913 to RL for
services not rendered for the two students identified, for a total of $1,839.

Fees Not Deducted From Payments

PRDE did not deduct a 5 percent fee established in the SES contracts from the payments made to
the SES providers for the use of PRDE’s facilities to provide SES to the students. As a result,
PRDE made overpayments to AMAR and RL totaling $44,177 – $21,952 and $22,225, respectively.

According to clause number 30 of the contracts, SES providers were required to pay PRDE a 5
percent fee from the total earned from providing SES services to students in each school for the use
of PRDE’s facilities in providing those services. PRDE was allowed to deduct the 5 percent fee
from every school invoice14 submitted by the service providers. However, in our review of 12 paid
invoices, we found that, although the withholdings were processed by PRDE’s Payment Division,
the 12 checks issued to AMAR and RL did not contain the appropriate withholdings. Therefore, the
two SES providers owe PRDE at least $44,177 based on the payments reviewed, and possibly more.
For all provider payments reviewed, PRDE consistently failed to deduct the 5 percent fee.
Therefore, subsequent payments were likely to have the same error.15 In addition, the error could
have occurred in payments made on other SES provider contracts.

Minimum Contact Hours of Services Not Provided to Students

PRDE lacked controls to ensure that RL provided students a minimum of 40 contact hours
of SES, as required by the contract terms and PRDE’s SES Policies. In our review of the
six invoices PRDE paid to RL and the supporting documentation, we found that RL did
not provide the required minimum of 40 contact hours in five of the six schools to 78 (18
percent) of 433 students that received services during the period reviewed.16

PRDE’s SES Policy and Procedures Manual, Circular Letter 10-2006-2007, and clause
number 5 of the contract between PRDE and the SES providers require a guarantee of a
minimum of 40 contact hours with the participating students during a given period based

13
   We estimated the $699 in questioned costs based on 26 contact hours missed at a rate of $26.90 per hour from the 40


contact hours contracted. The contract established that a total of 40 hours would be provided to every student at a rate


of $26.90 per hour. RL invoiced PRDE for the full amount of hours contracted. 

14
   SES providers identified the invoices by school and billed based on the amount of students served at each school. 

15
   We calculated the possible overpayments based on the payments, not included in our review, made to the two SES 

providers prior to presenting the issue to PRDE’s attention. For the total dollar amount of these invoices, PRDE may


have overpaid AMAR and RL $1,939,995 in subsequent payments – $1,002,902 ($20,058,033 x 5 percent=$1,002,902)


and $937,093 ($18,741,862 x 5 percent=$937,093), respectively. 

16
   Although RL did not provide the minimum amount of hours, it billed PRDE according to the hours provided. 

Final Report
ED-OIG/A04I0041                                                                       Page 9 of 27

on the rate established by the SES provider. Under the terms of the Policy and Procedures
Manual (revised on October 2006) and the contract, if a student cannot attend a session,
the SES provider is responsible for coordinating with the parents and the student for
another date to provide a make up session for the one missed.

SES Teachers Provided Instruction During Regular School Hours to the Same Students

We found that four teachers in three of the 12 schools sampled provided instruction in Spanish,
English, or mathematics during regular school hours and were contracted to provide SES during
after-school hours to the same students they taught during the regular school day. Three of the four
teachers were contracted by RL and one was contracted by AMAR.

According to PRDE’s SES Policy and Procedures Manual (revised on October 2006), Circular
Letter 10-2006-2007, and clause number 26 of the contracts between PRDE and the SES providers,
teachers or librarians employed by PRDE to provide instruction in Spanish, English, or mathematics
during regular school hours are prohibited from providing SES to those same students.

Recommendations:

We recommend that the Assistant Secretary for OESE require PRDE to—

2.1		 Provide documentation demonstrating that the students identified by the auditors as
      ineligible to receive SES were, in fact, eligible and documentation demonstrating
      that the students identified by the auditors as not having received SES did in fact,
      receive such services, or return to the Department that portion of the $6,250 in
      questioned costs paid for which such documentation is not provided;

2.2		 Provide supporting documentation for the unsupported charges or return to the
      Department that portion of the $16,092 in unsupported costs paid;

2.3		 Establish controls to ensure that school directors properly verify SES forms before
      certifying that students come from low-income families to ensure that only eligible
      students participate in the program and ensure services are provided before
      processing providers’ payments;

2.4		 Take appropriate actions to address the issue of services not rendered, and provide a
      response;

2.5		 Recover $44,177 from the providers for the amount owed for the use of its facilities
      to provide SES; review the remaining providers’ payments to identify any other
      payment made without the appropriate deduction and recover the associated fee; and
      establish adequate controls to ensure that checks are issued for the correct amount;
      and;

2.6		 Ensure that PRDE teachers hired by all SES providers, who provide instruction in
      Spanish, English, or mathematics during regular school hours, do not provide SES to
      the same students they teach during the school day.
Final Report
ED-OIG/A04I0041                                                                     Page 10 of 27


PRDE’s Comments

In its response to the draft audit report, PRDE agreed with most of the finding but disagreed with
the questioned costs regarding SES provided to non-eligible students and the provision of minimum
contact hours of services. PRDE requested that the finding be reconsidered and revised.

PRDE’s comments regarding each of the conditions identified in the draft audit report are
summarized below.

SES Provided to Non-Eligible Students

PRDE submitted the socioeconomic study for 10 of the 21 students whose eligibility was
questioned and other documents to demonstrate that it served eligible students, resulting in no harm
to the Federal interest for these expenditures. The documents included a letter from the Department
approving PRDE’s use of data from the U.S. Department of Agriculture’s National School Lunch
Program to determine Title I eligibility for the school years 2008 through 2010, retroactive to July
1, 2007. According to PRDE, the data made all of PRDE’s students eligible to receive SES. In
addition, PRDE contended that under 7 C.F.R. § 245.4, similar to Provisions 2 and 3 of the National
School Lunch Act, Puerto Rico was allowed to provide free meals or milk to all children in schools
under its jurisdiction, regardless of the economic need of the child’s family. Since the students
were eligible to receive free or reduced-price lunches under the National School Lunch Program,
they were also eligible for SES.

Services Not Rendered

PRDE stated that it recognizes the importance of proper supervision to ensure that SES is properly
provided, especially given the large size and scope of its SES program. To protect the program’s
integrity, PRDE stated that it implemented a biometric record invoicing system to track SES student
attendance and prevent any future false claims by its providers.

Fees Not Deducted From Payments

PRDE stated that it was in the process of reviewing invoices and expense reports of payments made
to AMAR, RL, and all other SES providers whose contracts required the provider to pay a facilities
fee, and recoup any funds in accordance with the terms of the applicable contract.

Minimum Contact Hours of Services Not Provided to Students

PRDE stated that it recognized the importance of proper controls and supervision to ensure that the
required number of service hours is provided by its SES contractors, especially given the large size
and scope of its SES program. However, it noted that the SES program is voluntary for students,
and the extent to which students attend SES sessions cannot be controlled. Nonetheless, it
implemented a biometric record invoicing system to track SES student attendance and the number
of service hours provided.

SES Teachers Provided Instruction During Regular School Hours to the Same Students
Final Report
ED-OIG/A04I0041                                                                     Page 11 of 27


PRDE acknowledged that this practice violated PRDE’s internal SES and Procedures Manual
(revised on October 2006), Circular Letter 10-2006-2007, and clause number 26 of both contracts,
which established that teachers or librarians employed by PRDE who offered instruction in Spanish,
English, or mathematics during regular school hours could not offer SES to the same students.
PRDE stated that it was strengthening its monitoring procedures and contract enforcement to ensure
that SES providers do not provide services to students with the same instructor who provided
Spanish, English, or mathematics during regular school hours.

OIG’s Response

We considered PRDE’s response and the additional documentation submitted. However, we
determined that the response did not warrant a change to our finding and recommendations.

Our response to each of the conditions identified in the draft report is summarized below.

SES Provided to Non-Eligible Students

PRDE provided a copy of the socioeconomic study forms for 10 of the 21 students whose eligibility
was questioned. However, 1 of the 10 socioeconomic studies provided by PRDE had been
previously submitted and reviewed during our fieldwork and we concluded that the income reported
by the parents for the school year 2006-2007 was above the poverty level established by PRDE. Of
the remaining nine forms, six belonged to the school year 2007-2008 and three to the school year
2005-2006, not to the school year 2006-2007, when the students’ eligibility was questioned.

PRDE claimed that all students in schools under improvement were eligible to receive SES. PRDE
also stated that the Director of Student Achievement and School Accountability within the
Department approved PRDE’s use of the triennial Socioeconomic Survey to determine Title I
eligibility. However, the Department’s letter stated that for determining the schools eligible for
Title I, as well as each school’s Title I allocation for the school year 2009-2010, PRDE may assume
that its schools have the same percentage of students eligible for free and reduced priced lunches as
it had in the most recent year for which PRDE collected the data and is not to be used to determine
the individual student’s eligibility for SES.

The additional documentation provided by PRDE in dispute of the finding does not cover the school
year 2006-2007. School Directors interviewed acknowledged that PRDE’s method of determining
students’ eligibility to receive SES was the use of the socioeconomic study. School Directors were
required to verify such information and certify each individual student’s enrollment form or SES
101 stating that the students came from a low income-family and were eligible to receive SES.

As a result, we maintain that PRDE failed to properly identify non-eligible students who received
SES during the school year 2006-2007; therefore, it paid $4,411 in questioned costs - $3,335 to
AMAR and $1,076 to RL. In addition, PRDE paid the two contractors $16,092 in unsupported
costs - $7,781 to AMAR and $8,311 to RL.

Services Not Rendered
Final Report
ED-OIG/A04I0041                                                                     Page 12 of 27

Although, PRDE is currently implementing a new biometric record invoicing system to track SES
students’ attendance, we maintain that PRDE still needs to establish controls to ensure services are
actually provided before processing invoices for payment. The new biometric system is a good
internal control measure to ensure that the students actually attend and that payment is made based
on the amount of hours the students attended, but it does not guarantee that they will receive the
services according to contract terms.

Fees Not Deducted From Payments

PRDE acknowledged that it did not deduct a 5 percent fee established in the SES contracts and
responded that it is in the process of reviewing SES provider invoices. As a result, PRDE should
recover the $44,177 from the contractors for the amount owed for the use of PRDE’s facilities to
provide the contracted services and identify any additional amounts owed by SES providers.

Minimum Contact Hours of Services Not Provided to Students

We considered PRDE’s comments that the SES program is voluntary for students, and it cannot
control the extent to which students attend SES sessions. However, we maintain that the minimum
of 40 contact hours should have been provided to the students based on contract terms and PRDE’s
internal guidelines. The 40 contact hour minimum for services provided to the students was
established by PRDE in the contract, the SES Policy and Procedures Manual (revised on October
2006), and its Circular Letter 10-2006-2007. PRDE not only established that the number of hours
could not be less than 40 but also added a requirement that if a student could not attend a session,
the SES provider was responsible for coordinating with the parents and the students for another date
to provide a make-up session for the one missed.

PRDE should be monitoring contract compliance and enforcing contract terms to avoid possible
legal issues such as breach of contract, which could eventually jeopardize the use of Federal funds
and affect the services provided to students.

SES Teachers Provided Instruction During Regular School Hours to the Same Students

PRDE acknowledged that this practice violated PRDE’s internal SES Procedures Manual, Circular
Letter 10-2006-2007, and clause number 26 of both contracts. We agree that PRDE should
continue strengthening its monitoring procedures and contract enforcement to ensure that SES
providers do not provide services to students with the same instructor who provided Spanish,
English, or mathematics during regular school hours.
Final Report
ED-OIG/A04I0041                                                                                      Page 13 of 27

FINDING NO. 3 – Lack of Controls to Ensure Parents Selected the SES Provider of Choice

PRDE lacked adequate controls to ensure that it complied with all requirements of section 1116(e)
of the ESEA and its implementing regulations, as well as with its own regulations. Specifically,
PRDE lacked controls to ensure parents of eligible school children selected the SES provider of
their choice. PRDE did not ensure that parents were informed of the identity of all approved SES
providers, which, in effect, restricted parents in their selection of an SES provider.

PRDE also failed to coordinate school orientation activities with all approved SES providers as
required by its own regulation. Such orientation activities are intended to provide parents with as
many choices as possible to assist them in selecting an SES provider to meet the needs of their
children. As a result of PRDE’s failure to coordinate orientation activities, parents were limited to
the choice of only a few providers, and, in some instances, to only one provider.

Section 1116(e)(4)(A) of the ESEA requires an SEA, in consultation with LEAs, parents, teachers,
and other interested members of the public, to promote maximum participation by providers to
ensure, to the extent practicable, that parents have as many choices as possible.

Under section 1116(e)(2)(A) of the ESEA, each LEA must provide annual notice to parents, among
other things, of the availability of services and the identity of approved providers of those services
that are within the LEA or whose services are reasonably available in neighboring LEAs. If
requested, the LEA must assist parents in choosing a provider from the list of approved providers
maintained by the State.

In addition, PRDE’s SES Policy and Procedures Manual (revised on October 2006), and Circular
Letter 10-2006-2007 (dated October 23, 2006) require (1) school directors to coordinate orientation
activities for the parents of eligible students with the companies and organizations, or both, that
appeared on the approved list of providers, and (2) the selection of the provider to be exclusively
the parents’ responsibility.

During our site visits to the 12 selected schools, we found that seven of the 12 school directors (or
58 percent) did not ensure that parents were informed of the identity of all approved SES providers
for the school year 2006-2007 and did not coordinate orientation activities with all approved SES
providers. Although the seven school directors maintained an updated list of approved providers,
they did not invite all the providers to orientation activities to promote their services to parents of
eligible school students.17 Only the providers that contacted the schools, either by telephone or
school visits, were invited to participate in the orientation activities; therefore, all approved
providers were not identified and made available to the parents. Providers that did not contact or
visit the schools never had the opportunity to interact with the parents and promote their services.

Furthermore, one of the 12 school directors interviewed acknowledged that the school only had RL
as its provider for that school year. The school director provided a school memorandum dated
September 26, 2006 addressed to the parents stating that RL, a business that had the support of
PRDE and the faculty of the school, was going to be the company providing SES during the school

17
  Orientation activities were coordinated every year at the beginning of the school year. Of the 12 school directors
interviewed, 5 stated that for the school year 2007-2008, they invited the SES providers that contacted the school either
by telephone or school visits to the SES orientation.
Final Report
ED-OIG/A04I0041                                                                                     Page 14 of 27

year 2006-2007. The memorandum further stated that the school had started its first year under
improvement,18 and in accordance with the ESEA, SES would be provided at the school in subject
areas, such as Spanish, English, and mathematics. Two parents of children attending this school
were interviewed and confirmed that they were not given any other provider options.

We contacted the parents of 27 of the 65 sampled students to determine whether they had been
given the opportunity to select the SES provider of their choice.19 Of the 27 parents,

		 Twelve (or 44 percent) were given the opportunity to select the SES provider of their choice.
    Of these 12 parents, three (or 25 percent) participated in an election process where they voted
    for one SES provider.

		 The remaining 15 parents (or 56 percent) were not given the opportunity to select the SES
    provider of their choice. Of these 15 parents, three stated that the enrollment form already had
    the name of the provider; two stated they signed up with the provider that had served the school
    during the previous year; two stated they signed up with the provider their children preferred
    from those that had previously provided SES at the school; one stated there was an election
    process but they did not participate; and seven stated they just signed the documents provided to
    them authorizing their children to receive the services but did not know the SES provider.

Recommendation:

We recommend that the Assistant Secretary for OESE require PRDE to —

3.1		 Establish adequate controls at the schools to ensure compliance with the elements specified in
      the Title I regulations for providing parents with choices of SES providers and ensure that the
      parents are presented with information identifying all SES providers from which they can
      select to meet their children’s needs.

PRDE’s Comments

PRDE disagreed with our finding and requested that the finding be withdrawn. PRDE contended
that our sample size was small given the large number of schools in which students received SES,
over 600, and that approximately 90,000 PRDE students received SES in 2006-2007, such that
PRDE had achieved maximum enrollment in its SES program.20 PRDE also stated that it does
ensure, through a number of different media, that parents of eligible SES students have access to as
many SES providers as possible, as follows –

     		 School districts provide at least two open houses for parents to meet any eligible SES
         providers. In addition, parents are sent a letter explaining SES, the open house dates, and a
         full list of the addresses and telephone numbers of SES provider staff.


18
   Although the memorandum stated that the school had started its first year under improvement, the school was actually


in its second year; therefore it was eligible to receive SES. 

19
   Of the 65 students sampled, 5 received SES during the school year 2007-2008. 

20
   PRDE notes that the parents of only 27 students of the 65 students sampled were contacted, a sample size of


approximately .07 percent of the total number of the PRDE students receiving SES. 

Final Report
ED-OIG/A04I0041                                                                      Page 15 of 27

   		 Each school provides brochures for the students to take home to parents, explaining SES,
       how to apply for SES, and providing contact information for PRDE who can assist with any
       questions or concerns.

   		 For schools required to provide SES, school principals invite parents to assemblies at the
       school with SES providers to discuss SES enrollment options.

   		 The back of the SES application form lists all of the eligible SES providers that parents can
       select.

OIG’s Response

We considered PRDE’s comments and acknowledge that PRDE implemented controls to
disseminate information about the SES program to the parents. As a result, we further revised the
approach of the finding and its related recommendation to better reflect the results of our review.
However, we maintain that PRDE (1) lacked controls to ensure parents selected the SES provider of
their choice, (2) did not ensure that parents were informed of the identity of all approved providers
for the school year 2006-2007, and (3) did not coordinate orientation activities with all PRDE’s
approved SES providers at the schools visited. As a result, PRDE restricted parents’ selection of
SES providers by limiting their choice to the selection of only a few providers, and, in some
instances, to only one provider. PRDE also claimed that the back of the SES application form listed
the names all of the eligible SES providers that parents can select. However, this process started for
the school year 2007-2008. Although the sample size was small given the large number of schools
PRDE claimed to have enrolled in the SES program, the results of our visits and interviews
disclosed that parents were limited to selected SES providers due to the schools’ methodology of
disseminating the information. For example, school directors limited the presence of SES providers
at school assemblies to only those that contacted the school, either by telephone or school visits; and
school directors continued to limit SES providers in school year 2007-2008 to those that contacted
the school. In effect, even though the back of the SES application listed the names of all eligible
SES providers, only selected SES providers were invited to the school to promote services. We
maintain our position that PRDE needs to establish adequate controls at the schools to ensure that
parents are allowed to select an SES provider from those available that they feel will best meet the
needs of their children and not only the ones school directors allow to participate in school
assemblies.
Final Report
ED-OIG/A04I0041                                                                      Page 16 of 27


                                      OTHER MATTERS 



Lack of Documentation to Support Changes to a Proposal Before Awarding a Contract

PRDE did not adequately document the approval of a change to the proposal submitted by AMAR
before awarding the contract to provide SES during the school year 2006-2007. The application
used to recertify contractors as SES providers, submitted and signed by AMAR’s President on July
21, 2006, was evaluated and approved by PRDE based on a proposed rate of $26.25 per hour for 41
hours of tutoring services offered per student, for a total of $1,076.25 to be allocated per student.
However, the contract was awarded at a rate of $27.11 per hour, for a total of $1,111.51 allocated
per student. This resulted in a difference of $35.26 ($1,076.25-$1,111.51) in the total allocation per
student for every 41 hours of tutoring services offered.

The documentation provided by PRDE to support the rate increase after it had previously approved
the proposed rate was a letter dated November 7, 2006, addressed to the SES Coordinator. In the
letter, the President of AMAR requested a rate increase from $1,096 to $1,111.51, without
providing any further explanation for why the request was being made. In addition, the rate of
$1,096 included in the letter as the basis for the increase was not AMAR’s original proposed rate of
$1,076.25. Other than the signed contract, we were unable to find documentation supporting
PRDE’s approval for the rate increase requested by AMAR. The rate increase resulted in additional
costs to PRDE of $382,606.

We suggest that PRDE establish adequate internal controls to ensure that proper documentation of
all procurement transactions is preserved to avoid the risk of subsequent disputes with contractors
and potential overpayment for services.

PRDE’s Comments

PRDE provided documentation to demonstrate that it adequately documented the rate change in
accordance with the cost principles in OMB Circular A-87. The documentation included a letter
AMAR addressed to the PRDE SES Coordinator, dated November 7, 2006, requesting the rate
increase. In the letter, AMAR requested an increase in the rate from $1,096 per student to
$1,111.51 (from $26.25 per hour to $27.11). PRDE also included a memorandum from the former
Secretary of PRDE, dated November 21, 2006, approving the rate increase.

OIG’s Response

Although we considered PRDE’s comments and the documentation submitted, we maintain that, as
an internal control measure, changes to proposed and approved rates should be adequately justified
and documented before awarding a contract. The letter from AMAR’s President to the SES
Coordinator, dated November 7, 2006, provided in PRDE’s response, was reviewed during the audit
and discussed with the SES Coordinator. We determined that the letter did not provide sufficient
evidence to justify the rate increase.

PRDE also submitted an additional document as evidence of approval for the rate increase.
Final Report
ED-OIG/A04I0041                                                                 Page 17 of 27

However, the document submitted was sent to PRDE’s Secretary on November 21, 2006, the same
day the contract was awarded. The document contained the name of the 17 companies approved to
provide SES during the school year 2006-2007, the rate per hour, and the amount of the contract.
Although the rate in that document matched the one in the contract, PRDE did not document why
and under what terms it accepted the rate increase requested by AMAR’s president after his
proposal had already been evaluated and selected based on the previous proposed rate.
Final Report
ED-OIG/A04I0041                                                                                  Page 18 of 27


                    OBJECTIVES, SCOPE, AND METHODOLOGY 



Our audit objectives were to determine whether PRDE (1) ensured that contracts entered into
with SES providers contained the elements specified in Title I of the ESEA and its implementing
regulations; (2) ensured that the contractors provided SES in accordance with the contract terms;
and (3) properly approved SES providers. The scope of the audit was contract activities from
November 21, 2006, through June 30, 2007.21

For the school year 2006-2007, PRDE awarded 47 contracts (including amendments) to 18 SES
providers totaling $112 million. To achieve our audit objectives, we judgmentally selected the
two highest-dollar SES contracts PRDE awarded during the school year 2006-2007, one awarded
to AMAR in the amount of $15,951,280 and one to RL in the amount of $13,105,680. We
determined the number of schools served by each contractor under the contracts (AMAR served
10,851 students in 166 schools and RL served 10,358 in 193 schools) and from those schools,
selected a sample of 12 schools, eleven randomly and one judgmentally22 (six schools per
contractor), and 60 students who received services, to determine whether the services were
rendered according to contract terms (30 from AMAR and 30 from RL).

We also judgmentally selected five additional students who received services from AMAR
during the school year 2007-2008, to determine whether the process to provide services to the
students had changed from the previous school year and also to determine whether services were
rendered appropriately. We also –

     		 Reviewed the contracts awarded to the two SES providers selected for review to
         determine whether the contracts contained the elements specified in the Title I-SES
         regulations;

     		 Reviewed documentation and interviewed PRDE officials, parents, and students to
         determine whether PRDE ensured that the contractors provided the services following
         contract terms;

     		 Reviewed the process PRDE followed for identifying and selecting contractors as
         approved SES providers23 and notifying parents of the availability of services and their
         right to select the provider of their choice; and

     		 Reviewed documentation and interviewed PRDE and school officials to determine
         whether PRDE maintained an approved list of providers.



21
   Although the scope of the audit was contract activities for the school year 2006-2007, we also reviewed
transactions from the school year 2007-2008 based on information that came to our attention during the audit.
22
   The school was judgmentally selected based on information that came to our attention during the audit.
23
   We reviewed PRDE’s process for reviewing proposals and selecting the SES providers for the school year 2006­
2007.
Final Report
ED-OIG/A04I0041                                                                                     Page 19 of 27

For the 12 schools and the 60 students randomly selected for review, we –

     		 Conducted site visits, reviewed SES-related documentation, and interviewed school
         directors, teachers contracted to provide the services, and personnel contracted as SES
         coordinators to determine whether the schools were following the established Federal and
         State guidelines and regulations in managing the program;

     		 Reviewed the process used to determine student eligibility;

     		 Interviewed by telephone the parents of 23 of the 60 sampled students,24 and two
         students25 who answered on behalf of their parents, to determine whether the parents were
         informed of the availability of SES in the schools, selected the SES provider of their
         choice from PRDE’s approved list of providers, were informed of their child’s academic
         progress, signed the proper documentation, and were satisfied with the services provided;
         and

     		 Selected for review 12 invoices26 submitted by the contractors for the 12 sampled schools
         (six invoices per contractor) to determine whether the services were provided following
         contract terms.

For the five additional students judgmentally selected for review that received services from
AMAR, we

     		 Reviewed the process followed to determine student eligibility;

     		 Interviewed by telephone the parents of four of the five students27 to determine whether
         the parents were informed of the availability of SES in the schools, selected the SES
         provider of their choice from PRDE’s approved list of providers, were informed of their
         child’s academic progress, signed the proper documentation; and were satisfied with the
         services provided; and

     		 Verified if the invoice submitted by the contractor was properly certified and paid.

We performed our fieldwork at PRDE’s Office of Federal Affairs. We conducted this
performance audit in accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.



24
   The remaining 37 parents could not be reached, either because their telephone numbers were no longer in service, 

or they did not answer the calls. 

25
   The two students had already graduated from high school.


26
   Based on the information provided, AMAR submitted 166 invoices and RL submitted 193, for a total of 359 

invoices (one invoice per school).


27
   The fifth parent could not be reached.


Final Report
ED-OIG/A04I0041                                                                                         Page 20 of 27


                                                   Enclosure 1




                                      "".n.   Rk. Otp' l"Im'" of Ed... tiooo
                                R.spooo .. .. Draft A.dit Rtpo ..: EO_OIGHo.IIOOn

                                                   S1DI:!i!t<d1O:
                                              M1 o.m.. M. Wompo
                                           u.s. n.p.nm...IofE<b>c.u..
                                            0I!ia: Dflmprtt<x Gm!:toI
                                                  61 FonyIhSW
                                                   _Iml
                                                  A1I-,GA 10301




        This _    is !hi: It>pJllOt: Dflhl: Pu.no Rico o.p.u_ ofFdJC,tion ("!'ROE") to IhI: U.S.
        o.p.u_ of Edne]rioD' , 0I!ia: of inIpooIor Gm!nI ("VIO") Im1! Audit Rq>cn I'D­
        OIGiA04I004 1 ("DnfI: Audi, R<port"), islU<dF.mu.y 4. 2009. <di1I<dPt.... ibco
        ~ <1Edwc4r;oor'. Cttmp/JaM_ ,.,d!              TirIo- I - S"f¥-rD1 Edwc4r;oor s.rncc (SE.S).
        OIG R'oi<w<d lido I S"",,'     ",I E<b>cotiaool S<n'icos (SES) tba, PRDE ~'icIed 1<1 . . ­
        fur IhI: 1006-1001 moI1OO1_lOOB aW>Ri)ftn. OIG «JD::lud<d!hot PRDE did _ _1y
        odmini_"""", of ib lido I fuodo e ' I      II "" SES ",,,,,!bat limo p<riocl OIG sp:cifici lly
                                                   j



        ~. _                 of PRDE ', SES ~1DI" ~ """"""" aW>Jded to AMAR
        Edora!iocW S<nn., iDc:. ("AMAR') mel Rod.. ~ iDe:. ("RL"). IhI: porticipui<Ic>,.,. of
        SES providon, ODd IhI: ~ izIclcocIod wi!hin!hl: iDc!MdcW It!>dom "Y ............

        OMS Cim>Ior A_II • .f_ . f , panwaplt C I prtMdrs tbat COSh DOCS! be II<C<SIOlJ mel
        ""' ...... obI. fo< _  meI.1'!ici<m ~ mel odmiDisIntioD Dfr..IrnI _            . be
        alIocobl<: to fedonl.....ds, ud be    !I . t«:Iy doc"",..,tM lD _ t o f<COV« _  .    u...-.""",
        be In molysi. ~!be nw.. of!hl: progom .....'i= artually obbic><d in . _ _ _ of
        hum to IhI: F«Ienl iDO<:<esL 10 U.s.C. 12l4a(a)(2) Thr US. Dq>utmc:m of&ln.]rioD
        rusDE") ....y ~ reap"'" to'-" <1liiy 1D""""""!hat is ~ to !hi: " '".... of
        IhI: hum ib vX>Iaboa <--<11<1 In idoDtifiaIIl<: F«Ienl _ ... ouociaIOd. wi!h IhI: _ _ _ l4
        CUt      t IU2(a)(I).
        PRDE', ,t>pJIlOt: bokno-, _     <III . . ob IhII Audit Rq>cn ~ obwId rosoJ,.y CDOSt of
        OIG' , <:aDC<mI by p ~ ..1<:mi>" ~ _                          in !hi: fOllll of <:ahJ0ih, mel
        <:>:plains IhI: _           fur IhI: ~"".. ~ by OIG.




                                                          ,
Final Report
ED-OIG/A04I0041                                                                                         Page 21 of 27




             L n:-l)Th"G NO. I _ SES C01Itrx. TtnIH

        EJirrltlilJ' afSLS S","'n
        OlG _..,.. PRDE failed 10 ~ icIrmify ~bl< ........... who r=i\...d SES ~
        1006.:>007 and. 2001·200S from AMAR and. RL n....~ OIG "",n-d 14.411 ia com
        (lJ ;1ll1O AMAR and. $1 .016., Rl,) and. _..,.. $16.092 ia rom _ '.... 'W""«I ($7,711 10
        AMAR and. $8.m 10 Rl,)
        OIG sdoct<d . un¥< of65 _            who""';.....:1 SES ~ _           >-' 1006.1001 and.
        1OO7_200S. and. ~u...d "'" soO" ". " ,., dUlly _        PRDE ....... to ~_
        ~bilioy. O lGmadefmo:liaprools~1O 21 SES_. Sp<cifically. wilhreprdolO i..
        """""' OIG', fmo:liap....., .. foIJows
             • OIG cwld _         ~         <iiYbiJily frIo-..., _    bocame .... &mily _       WI<

                    ~ from .... fonns. ~ OlG ..... o<I..,.. PRDE paid '_ Ii "'" COSh of
                    $2.15210 AMAR

             • OIG _             oha. b:a- _ . . . . . , ~l>l< fm SES bocame "'" ~ fllDily_
                    ..... above .... povmy I<>Yi..oablisbod by PRDE frio- sdIooI }UI 1006.1007. n..rlore.
                    OIG _        oha. PRDE made ImOIlawIble npmdi"_ ia .... _ _ of14.411 .

             • OIG _..,.. PRDE cwld _locale .... f"""" ro. .... 15 _ . Tho«fin. OIG
               _..,.. PRDE bad ~ com of$ll.9-W ($7.781 paid 10 AMAR fOO" ~
               _     ...... $6.159 paidIORLfrIo-~_) I

        "' j_PRDE_Socioooc-:   · :::,::jc:_ ro. . _ Of .... _ W_~biIny
        ..... ~ by OIG.' n.. S          i< data is ,,'aiIabIe leo-:

              •
              •
              •
              •
              •
              •
              •
              •

        '' ...   ""',.PRIlIl ....... _ ..........._"'"""''--'
           ' ' ' ' ' _..... . . ... . .... _       _   ... '''''L
                                                                 _ _ _. -... _
        ".-       .... _ _ ._100'1'"'100'1.,."., _. _                       _ _      .. _ _      .•
        _ .PRIIE ___    "_ __100'1-1001.
         _
                     .
                         _
                             ~
        • ... M .
                                                            ,
Final Report
ED-OIG/A04I0041                                                                                                Page 22 of 27




                •
                •

        hi oddiboa, _ 7 c.r K t 24H, similar to Pro\'isiaio 2 """ j schools             _Ill<   N..uxw
        Sch<>ol Lu!rh Act, Puono Ric<> is .uow.d to pwo.'ido II"" _         or milk to 011 chiIdr... ill schools
        _ _ tbeir jurisdicIiaD, ~ of the ..,.,.,.,.,,;< _           Df the dUJcf. &mily. !II. <J«i« to do SO,
        PRDE', . ,b.tic>1 """Y)', I""fut       ' 1ri<mlWIy. ""'" 1>0 _ _ by Ibo Food ODd Nlllritioa
        s.nx. wilhin til< US. Dqa_ of ~ PRDE ,«<in"'. i<II<l, ...1«1 May I, 1001,
        fromMr. J...... E HarmoD, R.pom:I DiRdcr ro< 5p«i>l NlIIrilioo.l'rop>mo, ~ Pu.no
        Rico', Irioonial Socioa-..wc ~1q>O<I fDI Sch<>ol y~ 200S tbrwp.1010, . -..
        1o.fWy l . 2007. ' Also, 0.. Zollie S~_ J,., DiRctar DrS......", Achie1._ """ Sch<>ol


        At1 is      _to
        Atrnom+h'prithiD USDE 1IfP<O''<CI PRDE' . .... of this cia.. to _ _ Tille J olipbility'
        AIry""""" who is <li1;l0l0 fix fIe.. ... ~rW!uocloos

        . . - ore ~bI< far tbr N _ Sch<>ol
        ~ Ibodut_prcn'idod.'
                                                        LuoclI_
                                                                          _Ill<    N.n.c-! Sd>ooI LuoclI
                           be from • .,.".. iaam< fiImiIy" ..... oIipbl< for SES.' Bee ..... 011 ofPRIJE' ,
                                                                         thry..., also aU <lipw. fur SES.
                                                    . " "aIetha1 PRDE><n-.d~"""" m<.b.tha1
        1hru is "" bum to 1bo F<d!nI im<ust fur,... "'I"""'ibRl

        COIn [lit" S",i<n Rnlikrd

        OlG foomd!bot PRDE paid $1,139 iD ~ roll> fuI..mo.. _ r«d<rfIII ($699 to RL
        ~_            y= lOO6_2007 ..... $1 ,140 to AMAR <biIIfI sdoooI y...-lOO1-2OOSl. OIG
        ~ tho prnm. ofl7 oflbo 6l sm>pl<d ............ ODd. fOllDd. thai IW<I of!be"- did
        _ RC<i .... ..mce. iD ou:udaw::< with ..... prm-; ..... COIlIIxtual obIil'l'li"",_ OIG _ thai
        .... .......", ....." " . - SES"";""', bullIipd tho arttudaot:. - . , mil tIw: """ .......",
        _              "" .... or ........ ocasiom, bullIipd .... . - . rnst<n    IS   iflbo had rKftvM ill tbo
        Iequir<d C<IIIla<! bwn
        PRDE ~!bo impJo-.oofpropol ",¥,,'isiaio to........, 1Iw SES .... ~
        provjdod., i -d!yp:...... tbrlaq;e~lIIIIIocap<o f ilsSES _ _ ~itdis<uss<d
        _     aIq.d j ... ic!mts with USDE', OlG ~ o~ ill Puono Rico. -'ho . .. f<ned 10 the
        OIGmy __             Jq>O<kd~    . . off""c1 _ _ forpaymmlmd _ _

        IeIaI<d to ~ of COIlIncIUaI ~""" by SES provj<IIn. Mor=w, to proI<Cl
        " , " _'. iDI<p;riIy,PRDEbui=V        ",hi      hie=ardim"<liciDj: . ymmtotnd
        SES _      "'-"I11III10 Jft\- 1Il}'!idure rw. claims byils SES JIRl''icIrn. PRDE_
        AsUTEClOi~IIIIII~Ibo_-.:lim~symm.




        ....' ... "","" ..
                       .

        ' ... NoClOldLoft_ Ad, So<. 1701; So<. "'11(0)(").
                                                           ,
Final Report
ED-OIG/A04I0041                                                                                                    Page 23 of 27




        n.. ""-'ric recm:l im~ ry>I<m ~ Ihat oach SES pm..... up _                                  ill ........
        by usiDfl. !mfler priaIiD.,o:.J'SI<m- A, tbe be.' in!! ..... ""'" of oach tIl101iaf;...Doa. oach SES
        sb>dom ""'" place his <II" boo:!mfler "" tbe bic . it _'ommsure ...... '                 Eadl SES
        sb>dom'l !mflerpriaI cia", bas be... roIIockd ..... 1I<nd docttooicaIly by PRDE, sueh Ihat.......,.
        sb>dompi>oos his or be< ~r o. tbe _ r , tbe.yst<m will only """'~ ~bl< SES
        _ . ' n..""-'ric recm:lim"<licinf;syst<mr«<J<dsbochSES _ _ , 'I' .mdtbe
        _       ofnm. Ihat tbe sb>dom .... """"" bytbe awb<- SES pm...... ,"-OrM to f<C';""
        po)"'"'" fOO" .....Y<s frnm PRDE, tbe SES pm""'''- _                 tbe ""-'ric... J 1M e f<COrd.,
        md PRDE will I"-Y tbe..- ib 1oomI}- me h _ "" tbe ocruaI_ ofnm. eao:h SES
        sb>dom rea:iv..:! IIlI<IriD!I ",,;=, .. - - . d by tbe f«XITll ~ 2l04 1o JO% of
        SES paniciponrs <mon.d ill """"'" cycle. Of< 1IIiDf! tbis ..... sys><m I, is aprtled dW 100% of
        _       putitipotiD,o: ill SES will .... tbis ......yst<m roo-tbe IIaI SES cycle.



        OIG f""""- dW PRDE did_ oIeaxt. 11"''- f.......blisbed ill ib SES COD!IXIS IIrilh
        AMAR mdRL frnm pojI1DOD!I mao!< 10 _ c-.w1on roo- tbe .... ofPRDE' , facilibes to
        ~        SES. Sp<cillcally, 0 1G _Ihat PRDE mao!<            "'-.spa)_
                                                                       obiIl!I sdoooI )'NllOO6-
        lOCH ill tbe _    of\44,lTl ($11.912 10 AMAR md $22,22l to RI.) _        ~ tbe

        fee. n..mor.,OIGrero             'dlhattbeAssisums.a-yfu.-I'l"""'tary ..... s . . ' Y
        Edoratioo. (O ESE) ~ PRDE to rK<I>W \44, 171 frnm _              c-.w1on. As r>.-idoso<r ofib
        fiDo:Iiap, OIG poiDIIlO si:s iDvoices 1Iiomi1led by A.\iAR md si:s iIIvoic<s _     hy RL,
        . . - ofwhitJo. C<ID1Iim. I pon=I facili1ies fee.

        PRDE "I¥"'.... OIG'I . . - to tbis....-. PRDE is iD tbe~ of ....~ im-oio:: ..
        m d _ Iqoo<1I ofpo)_ to AMAR, RL, md oll<llbtr SES p"""'''- COD!IXIS
        I<qIIir< tbe"""..... ,o pay. filcilibes fft. To tbe "'..... Ihat PRDE is owed filcilibes r...s frnm
        ib SES provid<n, it will rec<IOIp my"""';'" iIl",<udawt IIrilh tbe"""" of .... awJicabI<
        ~.




        O]G f""""- Ihat PRDE lachdconlrob 10 .....n Ihat RL prtMiod SES miNm"ID
        of4O<ootac! bwn lI ~by""""""'" _ . OIG " akdlhat 1Softbe4JJ . 1IIo:i!IIts
                                                                                     _1Irilh.
        sampI<d did_ rea:i,.. tbe ~ mini"""" of 40 bwn ofSES

        PRDE rK<1!Pi .... tbe iwp<>-.oof_ <XICI!ro1s md ~ to ........ 1hat tbe.-..quisite
        ZUIIIborn of""';'" bwn ..., pm'icl<d by ib SES <Ud> __ "", eopocially 9 - 11>0 WII" liz< .....
        ICop< of ib SES JII'Ipm> ~... , PRDE abo _Ihat tbe SES _                is lWunwr roo­
        _        , md;, cam><>I COIlIrnI .... aI<D! to whitJo. _ . - SES RSSi.oDs. No...e I I, as


                                                           ,
        ' "'"" _ _ _ ol ... _ _ _ _ _                                          EX'
Final Report
ED-OIG/A04I0041                                                                                            Page 24 of 27




        _ d """"-., PRDE 1m imp!      ..... a biom<tti< """'" im-oiciDfl system to I%xI: SES
        lIl>IIom.n   !.
                   e md!be '""""'" ofbwn of...,,'ice poovicled.. n.. bicmoIriJ:: ~"'.... _ .....
        !his issut~, .. it 1ncb!be ~ miI....:J. Df .. eII SES 1II1«iDfloessioa. such Ihot
        PRDE =_10.-!be '""""'" ofbwn.oc:h sI!Jdom _ _ SES.

        SES .. . voIuowy prop;nm f« <ii~ PRDE 111>:Imb;"- are _ ~ 10 1II<D1i SES
        1II1«iDfl....a-. PRDE'. «JDhcts";!h SES ~ fo< schoo! y= 2006-2007 ~ !hal
        ,-...:Ion ~ 40 bwn ofSES ><nXes!o oach <lip0l. sIui!<DI. Ilmv<>w, _ PRDE "'"'
        ill SES ~ COD farce.~ SES . . - ! o -1III<IriD! -"--                          n...-.roce.
                                                                                       ill """"
        cues, SES IIIton WORP"""" bill "'" 011 o f " - who sipd ~ for SES......z.d!be
        ...a-. Bocom. SES ~ odborod 10 11m C<ICIInctual obIiptiom 10 - . SES 1UIon
        .....;Job!< b-!be og-' up<ID limos. PRDE did _ ptmIiz<!be ~ for !be lack of sIui!<DI
        ........M" N       I! IS, PRDE ', 1Iiom.1ric J«O<d system 1m _ imp!<m<m<d!o """"
        0CCInIeIy1n!l:k!be '""""'" ofbwn it> SES coaIrxtan """w ..rnc:.. 10...-. As """"­
        .bo>y' iD ordoI-to ~,-, p " } - f« ..rvi<rI from PRDE, !be SES providoo ""'" ...... dJmiI.
        biom<tti< .........M" IN<I<d f« oadt..- willi Ul!fiD,"OiaI. SES """~ im"Oial no .......
        pr<dxft by a lhird-porty, AmlEC. !be ,_Ihot _            PRDE iD imp!        li!,t md
        ~!be Iy>I<m.IUCh Ihot PRDE 1m"""""", i                   I !      """'" vtrifyiaf;!be '""""'"
        ofbwn ofSES 1III<IriD! to eadt IIDIIem, .. _ 1 0 PRDE 112ff. PRDE will poy!be_
        ill hourly .... bosod _!be I1<fW1i _         oflimo -.h SES sIui!<DI =on...! bJt<Jriaj!; ~
        .. _          by !be rK<1(d, md vorifiod by AsillEC mdPRDE.wr

        Sf'S TH<~ '" l'tJli<y

        OIG foomd ..... !ilur1NCbrn ill !be odoooh i1 soq>I<d "",,-id<d _      <ImiDf;~ schoo!

        bwn, Iftre cwmkkd 10 """W SES, md prtMdrd             !bose...,,,,..
                                                                          to!be...,...- <Iurinj!;
        _ _ _ bOIIn. ~ to 01G, _                     of!be - . . ....ecoottl<k<i by RL md ..... by
        ~

        PRDE or.boov~ !hal !his ~ violakd PRDE'. iIIkmal SES IIId ~),IawaI,
        CimIW- r......- 10--1006-1007, mdcLa...IW<dy_Ii>: ofbolhcoottxls, which ~ Ihot
        - . 0< hbnri .... ~ by PRDE Ihot ofl=d _                           ill SpoDish. F.DpIh. ..
        m.!hrmotic><ImiDf;f<!Ill",sch<>oIboun~_SESIO!be..,..."- . PRDE ..

        CIID<IIIly ...... ~~ it> ~ ~ mdC<CIrXI..na.""""", 10 _                                  Ihot SES
        ~ do _             """_ SES ><nXes!o..- _!be ...... iaIIru<tar who prtMdrd
        SpoDish. F.DpIh. ..............Iia iIls!ru<!ioo. <ImiDf; ",pial- _   houri

        JThl)Th"G NO. l _ r .nirip.1iooo of SI:S Pnnid<n

        OIG _Ihot PRDE did_ ........ m.. jnprm po:ticipobaD of SES provjd!n .. il l - . .
        which.-inod!be cboice ofpoRllD of o!ipbJo schoo! chiIdrm 10!be , I lim of oaly. n

                                                        ,
        "",,'idIn, md, ill..,.". ""'"""", to oaly..,. """~ OlG . _Ihot !his .... ,WaIiOD of
Final Report
ED-OIG/A04I0041                                                                                                    Page 25 of 27




        PRDE', SES Policy ODd PI         !   '"   M.mmIIDII CirwIar i.<ru< 10-1OO6-:!OO7, dmd 0c!00r<
        21 , lOO6, _ _ idoed Ihat

            1) School diucroo IhoWd. coordimte <>ri<IIbtioD octi\iIi<s fo< tbo poRIID of e!ipbJ< III>IImb
            wilh tbo C< I ... mdior ~ Ihat _ _ oo.lh< lJ¥O'...:Ili>I ofJm''idon; ODd

           .,.....
            2) ThoI<i<dioD. oftbo ~ will 110. =.Iusiv<lytbo =p<IDIibiIityof .... pmm, _                ,


        Sp<ci6c.IIy, OIG ........ Ihat duriDfl ill lite ,.;,.;,. to ....."" ori<ct<d _ ', it fuuod Ihat ........
        scboaI diucroo did. -,;rlIIII pu<IID full ><=IS to .... w. oflJlP<OV'd SES provid= fix scboaI


                                                                                      00_ . .
        year1OO6-:!OO7. OlG_Ihat ............ scboaIdiucroom.in].i""" .. ~li>Iof
        IJ¥O'...:I Jm'~ lui did. _ im;" 011 tbo provid= to ori<mation acIi,iIi<s wilh poRIID of
        ~l>Io scboaI _           to JIRl'II'I" lhrif..me..; 0DIy .... Jm'wn tba!                     odIoois,
        _     by t<\q>I>oDo or ochooI ,'isits, w<u im'ikd to participoIe iIllho _otion octj,iliel.

        PRDE _Ihat OlG', ~ Iilr, ....."" odIoois, is.....n. g""' .... ~ ~ of ocboois
        ill _ _ =ftwd SES, "''''' 600, 0Dd1hat _ _ ody 90,000 PRDE_
        =<iwd SES ;"1006-1007, lid Ihat PRDE Iw ~ m.";"' .. _ _ iD ill SES
        proppm.' PRDE also _    Ihat i t _ iD ba """'"             m..
                                                                tbrour;b • . . - of<lif'f<Rm-.,
        poRIlb of oti~ SES ............. OCC<SS to u III&D}' SES Jm''id!n .. possibIo, .. foil<nrl:

            o School disIricII)G''ido .. 1out two "P'" _         for pa=D 10..,.... myotigblo SES
              )G''idon. !Jt oddilioa., pu<IID ...,..." • I<!I« np . ini"!l SES, Iho "P'" _  "'1<1, "'"
              • fulIli>I oflho - . . . . . "'" ~ IUIIbrn ofSES)G''idor< staf[ I.
            o Each ochooI pm-.; .... broclurel for .... _ 1 0 uk< """",10 p.-...... <:<pIaini"fI SES,
              how 10 .pply for SES, "'" pm->diDfI COIIbct infoonation for PRDE who em .,.;., with
              " ' l ' q t - IXua:t1iii. ' 1
            o Fe< ocboois ~ 10 pm-'ido SES, scboaI priDcipo.h imit. poRIlb to ISS<D1bDeIIlIho
              scboaI with SES)G''idorn to _          SES <IIrOIlm<m opr;am.
            o Tho bact. of .... SES owJicati<oa form lists 011 oflho <ii~ibl< SES prov;d!n thai pa....n
              em 1<i<ct.ll

        Fe< _ . - . ""'~ ~1ho SES """ie.boo)G'.... . fulIw. of)G'. . . .
        1ho.n.ptiaD Ihat PRDE did. _........, mnim" panX:;p.;a.. ofSES pm-'id= 01 ill ocloooIs
        ODd ~""Ih< clooice ofpoRllD of oIipble scboaI childrm is ~ iD<anect ~ ,
        PRDE ""', tba! ibis fiDdin(: 1 1 0 . _

        ' PIUIE _ _ ......      _of.... :n_....... _ _ _                              ~.          _ _ ..
        1!' . ...-.O'J""'_of... _ _ ..... PRDE _ _ ""-
         SooEX . . . _ _ _ .. ,.. _ _
        " SooEX T.
        " SooEX '-

                                                            •
Final Report
ED-OIG/A04I0041                                                                                         Page 26 of 27




           n.   }Thl)Il'iG NO. j   _   Titlo I R ....u-...... " ill Iadilidoal S........ Ap-Noo ... "

        OlG _!ba. PRDE', iDdi\-iduaI """"'" ~ ..toblisb<d .. poll ofits~_
        pr<ICftS 10 mroll SES _ . did "'" iIIdud. 011 Df!be ~ . 1 _ for _             ymn
        ;>006.1007 md 1OO7·lOOI. PRDE"II'_ ~ with Ibis fiDIIiD!: IDII .. ~ to iqro\.. ill
        form to iDcli>doe all of!be ~ . - . . 1I<nm..... PRDE clots dis.lU'" with !be ~
        asptd ofOIG', ~!Iw Iht ~ domtaI ..... loc.kiD,o: ill PRDE', iDdi\-iduaI """"'"
        ..-
                "(I]nform .a,.., "" how!be J>OMl" md - . ..<IIIId be "'lJlIarIy iofOl1ll<d of!be

                -. ~ "
        hi faa. !be ay  clots r..pr. _Iht pn>vi .... iofOlDl Iht parmi> _ _ oflht SES
        """"",', _ _ after,        =uiD..-
                                        ofboon ofllll<lriD& ou-I _ _ _ Iht provicIoo
        md JmmI, are pafuna<d "



           IILOTHER U\ITERS

        OlG fouad.tbatPRDEdid_ I [ .... y_Iht_-.Jof . ~tolhtpIl¥>Al
        submintd by AMAR before.....diaf; Iht C<IIIInrt 1O)R'"idt SES ckIriDfI ochroI}"Of ;>006.1007.
        OlG _        !ballht apphcation ustd to reani{ycoalIxhln as SES)R'-icIrn. _ned md
        ":pd. by AMAR', Prtsidom OIl}llly 21 . 2006. ..... ~ md. app<O\"td by PRDE baotd ""
        ,pot>Jl««lnlt ofJ16.21 "'" boour fo r 41 boon of1llklriD!l....x.. 0_""' ........... f(ll"'
        IOtIl of$!.016.211o be ,lloc.t<d ""' .......... Tho C<IIIInrt ..... nnrdtd at . _ ofJ11.l1 "'"




        -
        holur. for ,Iota! of$!.I! UI aIloeoI .... ptr Sl••d.,n1. This I<SIIIItd ill. di&r<DOt of$11.26
        ($IJIUI - $1 .07621) iII!be IOtIl alloca!ioo. "'" """"'" for ...-eJY41 boon ofllllOriDfl otn-x..


        PRDE .... prov;dod_tionto-'lhtmc-iII,.... AMAR ...... _ ,
        oddr<SStd ID Iht SES CoordiaaIa.-. daI .... No"ember " 2006, ~!be .... ~ .. hi
        Iht _ , AMAR~ ... ilia...., iD Iht me from $1 .096 "'" """"'" I. $1,11 UI "'"
        ......... (from $26.11 "",hom to $27.11) PRDE 1I¥"'"td Iht J'IIt iaaeue, which ...... wilhia.
        Iht alWonbIt nit, ill . _ _ _ _ from Iht rom...- Stcrttaryof PRDE, da!td N<IVtIIIbe< 11,




        " SooEX • .
        ~SooEX'.
                                                            ,
Final Report
ED-OIG/A04I0041                                                                                                     Page 27 of 27




        lOO6."n.....b:           =_Im<!hot PRDE od<quot.ly documomed Ih<,.,. ~ iD
        ocarim::e wi'" Ih< cos, priDcipIe< iD OMB Circular A_U



            Iv.em'CLUSION
        hi dosin& PRDE 1<>pt<1IidIy di.. _           wi'"      OIG', Draft AI>IIi1 Rrpan FiD:Iinf; No_ 1 ~
        (1) ~hili1y ofSES S1IJdrms, ODd 0) C-.c1 Haun for SES Ptov>irn . .. well .. fiD:linf; No
        1 l<prdiD,o: PanicipoboD.ofSES Pro\-id<n. PRDE respec!fidJy ~!hot 1b= ~ bo
                           "",sed _
        fl""IlS ......... 1II<i              PRDE"II'_ IIDII. dweo Ih< COII«DIduoI OIG raised in!:nll A»di,
        Rrpan FiD:Iinf; No.1 ~ (1) SES               Son,...       Not _ " " " (2) I'ro,-idoo- FociliIi<s F.... Not
        o..lrted ODd (3) PRDE', SES T-a.. Policy, .. well ... FiD:Iinf; No. J ,~PRDE ' ,
        !Ddi\'icIual _            Ae          "for SES_ PRDE ~ Ih< owortuailY 10 _ _ _ 1II<i will
        «lIIIim>o to _          to........, ""', all SES p<O'o-id<n f"oII<:Ior PRDE', SES polici<s IIDII. fulfill all
        «IIIIn<tUaI ohIjvn-




        ""' EX"
                                                              •